Transition by timing: mileage-based user fees and the dynamics of heterogeneous electrification pathways

Transport electrification erodes fuel-tax revenues and increasingly pressures governments to redesign road-pricing systems while sustaining long-term decarbonization trajectories. Yet existing studies largely examine mileage-based user fees (MUFs) and plug-in hybrid electric vehicles (PHEVs) separately to how policy sequencing interacts with technological heterogeneity in mixed electrification systems. This study develops an agent-based modeling (ABM) framework to examine how MUFs applied to battery electric vehicles (BEVs) interact with PHEVs under different stages of electrification. Using a comparative model parameterized using U.S. market conditions, the analysis evaluates alternative subsidy structures and two MUF implementation thresholds in markets composed of BEVs, PHEVs, and conventional vehicles. Environmental and fiscal outcomes are assessed using emission-retention, fiscal-recovery, and PHEV interaction indicators. Results show that policy sequencing strongly conditions electrification trajectories and fiscal outcomes. Early MUF implementation generates relatively strong fiscal recovery but weakens long-term electrification dynamics by increasing substitution toward PHEVs. In contrast, delayed MUF implementation preserves high environmental performance and stabilizes BEV adoption trajectories, although fiscal recovery remains lower in mixed markets because PHEVs reduce subsidy exposure without contributing MUF revenues. Overall, the findings demonstrate that the effectiveness of distance-based road pricing depends not only on pricing intensity but also on the interaction between policy sequencing and technological composition. The study contributes to the growing literature on heterogeneous electrification transitions by showing how transitional vehicle technologies reshape the environmental and fiscal implications of road-pricing design.